The observation that after some point, successive equal size increases in a variable factor of production, such as labor, added to fixed factors of production, will result in smaller increases in output is the
A) law of diminishing marginal product.
B) streamlining production function.
C) consumer equilibrium.
D) theory of increasing marginal utility.
Answer: A
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Which of the following points out that even if most workers were hypothetically willing to see a decline in their own wages in bad economic times as long as everyone else also experiences such a decline, there is no obvious way for a decentralized economy to implement such a plan?
a. efficiency wage theory b. relative wage coordination argument c. adverse selection of wage cuts d. insider-outsider model
When the cost curves have the usual shapes, at the point where marginal cost equals average total cost,
a. average total cost is at its maximum b. marginal cost is falling c. average total cost is at its minimum d. average variable cost is falling e. the fixed cost has been fully depreciated
In a grim-trigger strategy, a firm responds to underpricing by choosing a price so low that each firm makes zero economic profit.
Answer the following statement true (T) or false (F)
Competition as a dynamic process implies that the individual firms in an industry
a. face a perfectly elastic demand curve. b. utilize a variety of techniques, such as product, style, and price, to win the dollar votes of consumers. c. produce a homogeneous product. d. cooperate, attempting to establish a price and output structure so each firm can survive and continue to serve the consumer.